Hobbs says ‘No’ to power rate increase

Commissioner Pat Lyons speaks in Hobbs during a town hall meeting on a proposed electrical rate increase.

Hobbs says ‘No’ to power rate increase

Call it an adamant ‘no!’

As might be expected, none of the 25 Hobbs area residents in attendance of a town hall meeting Friday supported a proposed local electricity rate increase. Public Regulation Commissioner Patrick Lyons hosted the meeting held at Hobbs City Hall.

Officials with Southwestern Public Service Company, a subsidiary of Xcel Energy, asked a rate review in October, requesting a total base rate revenue (not including revenues from fuel) by $31,053,388, a 14.2 percent increase over currently approved base rate revenues.

Lyons explained his purpose as a commissioner was to gather public opinion in advance of a commission hearing set for mid-May.

He got an earful, both in terms of how the proposed rate increase would be harmful to residents, the municipality and the schools. He also heard several area residents who declined to address the rate increase proposal but applauded Xcel Energy for being a good neighbor.

Lyons distributed a chart indicating current and proposed monthly bills, varying in increases from 6.2 percent to 17.7 percent, depending on time of year and rate class.

“The current SPS rate proposal in its present form is not a rate proposal that the City of Hobbs or the majority of its residents can endorse,” Mayor Sam Cobb told Lyon.

He said under the current proposal, the annual cost increase for electrical service to the city in 2019 would amount to an increase of approximately $410,000 per year.

Cobb, also a business owner, said the city believes the current rate proposal creates a hardship on residents and the business community.

He applauded SPS and Xcel Energy for its investment in the region and the economic growth that may result from it.

“However, it is my opinion that the recapture of capital expense should be spread out over a longer time and that expense should be directed more to the individuals and entities that are receiving a direct benefit from the expanded service through a formula of rates and connection fees,” Cobb said.

Hobbs Municipal Schools Facility Director Gene Strickland stated the cost to the school system would be an additional $305,000 next year.

“Those are taxpayers’ dollars. We believe we are good stewards of taxpayers’ dollars,” Strickland said. “That’s why we began our energy management program over 10 years ago.”

Strickland pointed out the schools have maintained energy use to within a two percent variance during the past five years, but the bills continue to go up.

“A $305,000 increase would have a direct impact to our classrooms.” he said. “The reason for that is the dollars that we spend for our classrooms come out of the same pot of money that our utilities come out of. … We can’t afford not to pay Xcel. We want the lights on, so that would be a reduction to our teaching force.”

Hobbs resident Curtis Potter said he drove to the meeting in a 1999 Ford pickup that serves his needs.

“My current electrical system meets my needs. I don’t need a Cadillac system that Xcel is trying to sell me. If you look at their statistics, I’m already receiving power at 99.9-plus percent reliability,” he said. “I don’t need a mega system, yet every time they do an upgrade, my rates go up. If you do a cost-benefit analysis of their statistics, how much more reliable can they get?”

He addressed Xcel’s new power transmission equipment throughout southeastern New Mexico, acknowledging the good business decisions.

“Great for them, don’t make me pay for it,” Potter said. “They wanted access to a national market. Let them pay for that access out of their profits from selling to the national market.”

Northern Hobbs resident Shirley Mee detailed her frustration that Xcel continues to make money at the expense of the resident instead of charging the industries using the majority power.

“The other thing I wanted to say, as an agrarian, a 14 percent increase in an irrigation bill could make or break whether you’re going to irrigate or not,” she said. “We’ve got water problems anyway and this is one more thing that’s going to push a lot of farmers to not be able to produce.”